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THE SCENARIO
I was looking at a mortgage this morning, and I was curious as to the interest rate the borrower is paying.
The loan has had regular monthly payments paid over the last 5 years, and $198,984.80 is owed today. The monthly payment is $1,504.59, which includes $454.28 in Escrow impounds (for property taxes and insurance). The loan amortizes fully over 30 years.
The question: What's the interest rate on this mortgage?
THE SOLUTION
This one is pretty straightforward. The only things we don't know are the monthly Principal and Interest (P&I) payment and the amount of time left on the loan.
To find P&I...
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